Month: April 2017

A dog sled team welcomes the “Ruby Princess” to the port of Juneau during its maiden voyage in Southeast Alaska in 2015. Princess Cruises

Skift Take: Cruise tourism has become more important to Alaska’s economy following the dip in energy prices.

— Jason Clampet

A record number of cruise passengers are expected to land in Juneau this summer.

Cruise Lines International Association Alaska President John Binkley announced at Thursday’s Chamber of Commerce luncheon that more than 1 million summer cruise passengers are traveling to Juneau, The Juneau Empire reported. The association predicts the travelers stopping in the city from May 1 to Sept. 30 will spend around $183 million.

“The next time you’re waiting behind a tour bus and you see a lot of congestion,” Binkley said, “just think that, ‘Today, there was a million and a quarter dollars spent, outside money that’s coming into Juneau, into our economy here by those visitors,’ and maybe that’ll make you feel a little bit better.”

The cruise ship tourism industry is growing worldwide, Binkley said. The Cruise Lines International Association’s cruise lines have seen an estimated 7 percent annual increase. About 4 percent of its passengers have Juneau as one of their destinations.

More cruise ships, such as Windstar, are expected to come through Alaska in the coming years, and average passenger space is expected to increase by 15 percent from 2015 to 2018.

The first cruise ship for the 2017 season is scheduled to arrive Monday.

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Ryan Wolkov

PRC Time Shares

A promotional image of an American Air flight attendant and passenger. The airline just boosted salaries for flight attendants and pilots in a move that bothered some Wall Street analysts. American Airlines

Skift Take: When it comes to compensation, we’ve seen bigger mistakes by CEOs. This will get Parker more support from the rank and file in the years ahead.

— Jason Clampet

In the three years since he merged US Airways with American Airlines, Chief Executive Officer Doug Parker has been a preacher of sorts, arguing that it’s a new world order for U.S. carriers and that the bad old days are over.

Airline investors, which now include billionaire Warren Buffett, have been leery of this optimism, given the industry’s history of good times begetting bad behavior on worker wages and flight capacity.

The latest battle between labor and capital is in Texas, with American Airlines Group Inc. spooking Wall Street yet again by increasing pilot and flight attendant salaries an average of 6.5 percent, or by a total of $930 million through 2019.

“This is a seminal event, and represents the first, credible potential blow to our long-held ‘it’s different this time’ investment thesis,” JPMorgan Chase & Co. analyst Jamie Baker wrote Thursday in a client note, calling himself “troubled” by the airline’s “wealth transfer of nearly $1 billion” to labor groups. The bank cut its recommendation on American to neutral from overweight.

Responding to skeptical analysts the day after the pay raise, Parker described the higher wages as a correction to years of “incredibly difficult times” for airline employees. He also adopted a different twist in his long debate with investors: Every bad thing airline owners have feared since the Great Recession has actually happened and profits are still strong.

“All the things that I think people were worried about, we’ve done, and we still have a business that is producing returns like it’s never seen before,” Parker said Thursday, citing a glut of new flying that occurred when fuel prices plunged in 2015, labor wage hikes, and volatility in fuel prices, which began rising last year.

The effort is the airline’s way of responding to employees who have been critical of the large wage gap between American’s rates and those at Delta Air Lines Inc. and United Continental Holdings Inc., both of which have newer contracts with their pilots and flight attendants. Those contracts had put American’s pilots about 8 percent below the prevailing industry rate and flight attendants about 4 percent lower, according to a letter Parker and President Robert Isom sent employees on Wednesday.

“As a service organization, investments in our team are investments in our product,” Parker said Thursday. American shares fell 5.8 percent in afternoon trading and are down 6.5 percent so far this year.

The American flight attendants’ contract can be amended in December 2019, with the pilots’ deal coming open for negotiations the following month. Parker said the pay increases were merely an acceleration of higher costs that were inevitable from the next contracts.

“This investment is going to make a difference in our service,” Parker said Thursday, with the equalized salaries helping Fort Worth-based American close a revenue gap it suffers with other carriers. “And as that happens, all of you will be the beneficiaries,” he said.

Average union employee pay has increased by more than 39 percent since the airline’s December 2013 merger, American said. It’s also worth noting that in April 2015, Parker asked directors to change his compensation entirely to American stock, giving him more personal incentive to drive the share price higher.

Given the industry’s structural changes, Parker has said that American is likely to earn about $5 billion annually before tax, as a long-term baseline, with a $2 billion variance on either side for years that are either weak or strong. His larger point is the consistent black ink on the income statement: a roughly $3 billion profit during a down year that once would have meant red ink.

>>At a time when climate change is already affecting destinations and scientific research is under attack in many parts of the world, millions of travelers — lured by their love of local foods — help make agritourism a factor that tourism boards can’t ignore:Local Food Trend Keeps Farms at Center of Tourism Strategies

Ryan Wolkov

PRC Time Shares

Tents and a portable toilet set up for attendees for the Fyre Festival in the Exuma islands, Bahamas. Organizers of the much-hyped music festival in the Bahamas canceled the weekend event at the last minute Friday after many people had already arrived and spent thousands of dollars on tickets and travel. Jake Strang / Associated Press

Skift Take: First-time event planners mixed with Instagram influencers and poor infrastructure never add up to a successful gathering — no matter where it is.

— Jason Clampet

In this day and age, the young and beautiful live and die on social media.

And it’s been a sudden and ugly death for the ill-fated Fyre Festival, a multiday music, art and culture party that promised “an invitation to let loose and unplug with the likeminded” on the Bahamian island of Exuma.

The festival’s rise and fall has played out in real time on YouTube and filtered through Facebook, where would-be party goers are putting their anger on display. Instead of photos of boozy good times, people have posted pictures of rows of white tents that look like “Stormtrooper helmets,” blue port-a-potties near half-constructed plywood structures and limp, lifeless cheese sandwiches.

Organizers canceled the event at the last minute after poor planning, disorganization and lack of accommodations. Most of the A-list acts had pulled out days before, saying they hadn’t been paid.

It was supposed to be a sun-soaked experience filled with yachts, gourmet food and models. Ticket prices ranged from $500 to $12,000.

But by Saturday morning, the partygoers had decamped, many of them to hotels in Miami in hopes of salvaging a weekend. People decried the festival accommodations as being like a “disaster tent city” and a “refugee camp.”

“We will be working on refunds over the next few days and will be in touch directly with guests with more details. Also, all guests from this year will have free VIP passes to next year’s festival,” he wrote.

The hype began months ago, marketed with slick videos on social media.

“I saw it on Instagram and booked it before the lineup was announced,” said Mitch Purgason, a 25-year-old bespoke menswear designer in Charlotte, North Carolina.

The Instagram ads looked especially “ridiculous” — parlance for amazing — what with models like Gigi Hadid and rapper Ja Rule. Blink-182 was supposed to perform. Photos of the impossibly blue water and the sugary sandy beach looked incredible. What’s more: Wild, docile pigs lived on the beach and swam in the warm water, perfect props for a killer Instagram selfie.

Although the festival on the island chain east of Florida appeared to cater to the Millennial trust fund crowd, it was people like Purgason and 29-year-old Jake Strang of Pittsburgh who purchased early tickets — young professionals who wanted to spend a fun weekend in the tropics.

Both men paid $500 for a flight from Miami to the island along with lodging and food. Strang and seven of his friends planned the trip to coincide with a birthday. They reserved a “lodge” for eight, with four king beds and a seating area in the middle.

“Everything made it look amazing,” said Strang.

The festival website promised a treasure hunt of “exceptional proportions,” with more than $1 million in riches to be found on a private island.

Purgason said he was skeptical, but planned the vacation anyway.

“Worst case scenario, I figured, we’re still in the Bahamas in a villa.”

His first inkling something was amiss came on Thursday morning, after the first flight from Miami to Exuma. Organizers said the villas weren’t ready, so they whisked the planeload of partygoers to a restaurant at a nearby resort.

It wasn’t a private island at all, but food and drink were free and plenty. Cute pigs and bikini-clad girls roamed the beach. There was a DJ.

“They actually treated us pretty well,” he said. “The first three hours was dope.”

Jenna Conlin, 30, an advertising professional from Venice, California, said, “They were putting down bottles of tequila on every table in an attempt to make everybody happy.”

Strang flew in later Thursday and wasn’t so lucky.

“When we arrived, it essentially looked like a construction site. It looked like they were trying to sell lots for homes,” he said.

A promoter told festival goers to find tents and waved his arm in a direction. But the tents had holes that had obviously allowed rain to come in, because the beds were wet. They were given a Styrofoam container of food: “two slices of ham, lettuce and one slice of cheese on soggy bread,” Strang said.

A few lucky patrons had been relocated to resorts. Most had to find beds in the tents. Available rooms aren’t easy to grab on Exuma, a small island with a population of about 7,000 that lacks the well-developed tourist infrastructure of Nassau or Freeport.

The island’s hotels were already booked months in advance for a well-known regatta, wrote Robert Carron, owner of the Bahamas Tribune newspaper.

By daybreak, people were already lining up to complain, and buses began returning them to the airport. Soon, it was official: The festival was cancelled.

Word got out via social media that organizers said “circumstances out of our control” prevented them from preparing the “physical infrastructure” necessary for the event on the largely undeveloped island.

“I’m heartbroken at this moment,” Ja Rule, whose real name is Jeffrey Atkins, said on Twitter. “I wanted this to be an amazing event. It was not a scam as everyone is reporting. I truly apologize as this is NOT MY FAULT.”

>>This is a small ad buy, but good for Hawaiian, JetBlue and Fedex to spend money to try to persuade political types. Open Skies agreements are helpful for consumers, and for global trade. If the U.S. takes a protectionist stance against the UAE and Qatar, the repercussions could hurt U.S. businesses: Airline Trade Group Launches Ad Campaign to Support Open Skies Agreements

>>New JetBlue CFO Steve Priest has been leaving his mark on the airline in only a few months on the job. Expect him to make many more important decisions in the near future. The biggest? He’ll have a big say in whether the airline flies to Europe:JetBlue Delays Its New Aircraft Because of Reliability Issues

>>Overbooking has gotten a lot of attention in the past three weeks, but, most of the time, it’s not a big deal. Airlines know passengers won’t show up, so they sell a few more tickets than they have seats. What’s the harm in that?Southwest Airlines Promises to Stop Overbooking Flights

Ryan Wolkov

PRC Time Shares

A promotional image of a lighthouse in Savannah, Georgia. Visit Savannah

Skift Take: Smart move by a city that is headed down the road of overtourism faster than it may be prepared for.

— Jason Clampet

City officials in Savannah are asking residents to weigh in regarding how to manage tourism in Georgia’s oldest city.

City Hall has launched an online survey for residents to fill out as Savannah works toward a tourism management plan. The goal is to balance the needs of Savannah’s vital tourism industry with those of residents, especially people living in the downtown historic district.

The survey will be available on the city’s website until May 14.

City officials say tourism accounts for more than 26,000 jobs in Savannah and visitor spending of about $2.5 billion a year.

City Hall is developing its tourism management plan with assistance from Savannah’s Downtown Neighborhood Association, the Historic Savannah Foundation and the city’s tourism bureau, Visit Savannah.

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Ryan Wolkov

PRC Time Shares

In 2016, the government-owned airline reached the 700 mark of aircraft owned, making it the largest fleet in Asia and the fourth-largest in the world. China Southern

Skift Take: China Southern shows an enormous appetite for buying aircraft. It may buy about 300 planes by 2020, bringing its total to 1,000. That’s more than American Airlines is expected to own by then.

— Sean O’Neill

China Southern Airlines Co. said it plans to buy 20 widebody aircraft from Airbus SE in a deal worth about $6 billion, according to a filing to the Hong Kong stock exchange Wednesday.

The Guangzhou-based company said it will acquire the A350-900 jets, each with a list price of $298.9 million. Discounts are customary for such large orders.

The state-owned carrier, which recently agreed to sell a sell a minority stake to American Airlines Group Inc., plans to expand its fleet to 1,000 by 2020 from 700 now, according to Chairman Wang Changshun. The carrier has been adding routes to Australia, New Zealand and countries in Southeast Asia as it competes with China Eastern and Air China.

China Southern and its units have ordered more than $15 billion of new aircraft from Boeing Co. and Airbus since 2015 as more people fly in the world’s most populous nation. The International Air Transport Association predicts China will surpass the U.S. to become the world’s biggest air travel market in terms of passengers by 2024.

Ryan Wolkov

PRC Time Shares

The CDC could run out of yellow fever vaccine as early as next month. In this July 21, 2016 file photo, residents of the Kisenso district of Kinshasa, receive yellow fever vaccines.
Jerome Delay / Associated Press

Skift Take: A shortage of yellow fever vaccine in the U.S. could act as an impediment for travelers looking to visit South America and Africa this year.

— Andrew Sheivachman

Americans who need a yellow fever shot for travel may soon have a harder time getting it.

A manufacturing problem has created a shortage of the only version of the vaccine licensed in the U.S. The Centers for Disease Control and Prevention said Friday that doses could run out as early as next month. Officials are bringing in another vaccine that’s used in other countries, but it will be available at only about 250 of the 4,000 U.S. clinics that give the shot.

The $141 vaccine is recommended for travelers to certain areas in South America and Africa, and about 20 countries require proof of vaccination for entry. For most people, only one dose of vaccine is needed in their lifetime to protect against the potentially deadly disease.

Travelers who want the vaccine will need to plan ahead, said the CDC’s Dr. Martin Cetron.

“It may take longer and you may have to travel a greater distance” to get a shot, he said.

Yellow fever was wiped out in the U.S. over a century ago, and the shot is not part of routine vaccinations.

The yellow fever virus is spread by the same mosquito that transmits other tropical diseases, including Zika. Most people improve after a round of fever, chills and other symptoms. But roughly 15 percent get more seriously ill and can develop internal bleeding and organ failure.

Stockpiles of the vaccine have been strained globally, and shortages were a major problem during recent outbreaks in Africa. A smaller outbreak emerged this year in Brazil.

Drugmaker Sanofi Pasteur said it stopped making the U.S.-licensed vaccine because of broken equipment at its Swiftwater, Pennsylvania, plant. Production is being shifted to a new factory opening next year, company officials said.

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Ryan Wolkov

PRC Time Shares

A Hindu temple stands in the way of upgrades to a Trump resort in Bali. A player walks on the golf course at Nirwana Bali Resort which will be upgraded to a six-star resort managed by Trump Organization, in Beraban, Bali, Indonesia. Firdia Lisnawati / Associated Press

Skift Take: Bali has strict laws regulating the height of buildings, and the proposed tower from the Trump Organization would violate them.

— Andrew Sheivachman

Thousands of people flock daily to the centuries-old, sacred Hindu temple at Tanah Lot, a rock formation that juts into the Indian Ocean. An island at high tide and flanked by sheer cliffs, it’s among Bali’s most photographed sites, particularly for the mesmerizing sunsets that transform the waters into a shimmering orange vista.

It’s getting a new neighbor, described as “Trump International Hotel and Tower” in the Trump Organization’s promotions for what will be its first resort in Asia. They promise breathtaking views, a super-sized golf course overlooking the temple and an “enchanting and unrivaled getaway from the current luxury hotels” in Bali. For those weary of mere five-star opulence, it offers six.

Nothing that one might consider a tower is going to fly on Bali, where height restrictions prohibit structures higher than the island’s plentiful coconut palms — about 15 meters (49 feet).

Locals welcome new investment in the popular Indonesian resort island but are determined to preserve their unique traditions. Neighbors are resisting efforts to expand the Trump site.

And if a tower ever starts rising, local authorities are ready to flatten it.

“If suddenly they build an unapproved tower, of course we will stop them and demolish it,” said Ida Bagus Wiratmaja, head of the district’s development and planning agency. “There are special rules for the temple and the temple area.”

Tanah Lot and other temples dotting the cliffs are more than a lure for tourists. They’re the heart of life in the surrounding Beraban village, where tradition and spirituality are woven into daily living. The Balinese are proud that their island’s Hindu culture has flourished for centuries even as later arrivals — Islam and Christianity — supplanted it elsewhere in the Indonesian archipelago.

At a cost of about $300 million, Tanoesoedibjo’s conglomerate MNC will redevelop the site. The Trump Organization will manage the new property under an agreement made with MNC in 2015. That was before Trump was elected, so it does not conflict with his pledge not to make new business deals as president.

The two groups are also working together near the Indonesian capital, Jakarta, to build a super-luxury “Trump Community” in a 3,000-hectare (7,413-acre) mini-city alongside a national park that is one of the area’s last refuges for endangered species.

MNC and the Trump Organization did not respond to requests for comment on the Bali project. MNC in March reportedly promised to respect height restrictions and says it is still designing the new resort despite plans to shutter the existing one around the middle of the year. Still, the Trump Organization continued to bill the project as a hotel and tower as recently as Thursday.

MNC will also have to work around a temple on the site, leaving it completely undisturbed.

“Whatever they build should not deviate from our Hindu culture because it is the soul of the Balinese people,” said Made Rumawa, the religious leader of Beraban.

“As a priest, I insist they comply with the rules because they have been set out clearly,” said Rumawa, a towering man clad in white from head to toe. “So, whoever comes, whatever their intention, do not be blind and walk in the darkness.”

Plans to expand the land available to the resort, in part to accommodate a larger golf course, are struggling.

Villagers said MNC has had an offer on the table since 2015 to buy adjacent land, which is mostly used for growing rice and other crops. Wayan Surata, a former resort worker who helped MNC compile a list of landowners several years ago, said about 80 percent of the owners have rejected it.

Local Opposition

Ketut Sukarjaya, who works at the old resort and is close to retirement, said land belonging to him and his brother has been in their family for several generations and they had no financial need to sell it.

Surata said he was one of the few who has agreed to sell. Pointing to a verdant stretch of land bordering the resort, he said he sold with a “heavy heart” because he urgently needed money for a garment business he had started.

MNC’s offer of 150 million rupiah ($11,290) per a Balinese measure of land that is equal to about 100 square meters (1,076 square feet) is far below what villagers believe is fair given the prime location, Surata said. Most think it’s worth three to seven times that.

Selling is also a fraught issue because the island’s farmland is gradually being depleted, increasing a lopsided reliance on tourism. In Beraban, about 40 percent of arable land already is being used for housing and tourism.

“We are optimistic it will be more difficult to buy land because the people are now more aware that land cannot be created,” said Made Sumawa, the village’s stern-faced guardian of custom and tradition. “The investors wanted to expand the area but after they learned of the people’s character here, they realized it’s difficult to buy the land from them.”

Ryan Wolkov

PRC Time Shares

Facebook is hoping to attract more airline advertisers with its newest product, Dynamic Ads for Travel for flights, which is geared toward mobile users. Pictured here are images from Cathay Pacific’s Dynamic Ads for Travel. Facebook

Skift Take: These are the digital trends we were talking about this week.

— Sarah Enelow

Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines digital trends.

>>Google has all the tools, including a giant search engine, to make its mark in hotel metasearch and its competitors are starting to really feel it. The only hope for rivals is a hail Mary to regulators — or to focus on being faster and better:Google Hotel Ads Is Becoming the Behemoth Everyone Feared

>>The Momondo Group knows it has to spend big to catch up with the competition. Its growth caught the attention of the Priceline Group, which will be hoping the acquisition, if approved by regulators, will help boost its European metasearch operation:Momondo Group Is Still Spending Big to Fund Expansion

>>TripAdvisor is getting more sophisticated about prodding customers to book hotels on TripAdvisor or to more effectively refer them to partner sites. In an apparently modified strategy, TripAdvisor is finding religion in being agnostic about where its users book hotels:TripAdvisor Instant Booking Gets Very Personal